Human Resource Redeployability and Entrepreneurial Hiring Strategy: Evidence from Finnish Microdata
54 Pages Posted: 18 Feb 2021 Last revised: 13 Jan 2022
Date Written: January 12, 2022
The timing of talent acquisition is a central decision for new ventures. On one hand, starting small and hiring after demand is proven minimizes losses in case of low demand. On the other hand, hiring before demand is proven allows new ventures to start developing unique capabilities. We resolve this tension by proposing that the extent to which ventures hire before demand depends on human resource redeployability. We further argue that resource redeployability affects the type of employees hired. We test our theory with the population of Finnish standalone and portfolio ventures showing that portfolio entrepreneurs hire more employees early on because they have the option to redeploy them and that they hire employees with more transferable skills in order to benefit from the redeployment.
Keywords: entrepreneurship, human capital, hiring strategy, resource redeployment, new ventures
JEL Classification: M13
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